As the world pivots toward low-carbon energy, the demand for raw critical minerals—important inputs for innovations such as solar panels and electric vehicles—is continuing to soar.
The higher demand for critical minerals is expected to cause a significant expansion in the extraction and production of an array of mineral resources. For example, the World Economic Forum projects that the production of minerals including graphite, cobalt, and lithium could increase by nearly 500 percent by 2050 to meet the growing demand for clean-energy technologies. Estimated to hold approximately 30 percent of the volume of critical-mineral reserves, the African continent is situated at the very center of the energy transition.
A considerable amount of minerals—for example, 25 percent of tin and 26 percent of tantalum production—is sourced by artisanal and small-scale mining (ASM): low-tech, labor-intensive mining operations in which workers (largely unskilled labor) use rudimentary tools and techniques to access mineral ore. ASM is an important source of rural employment in Sub-Saharan Africa, with an estimated ten million people in the region working as artisanal and small-scale miners—sourcing critical minerals but also other minerals such as gold. These workers are often driven to the sector by poverty. At least sixty million other individuals facilitate these informal supply chains.
However, many of these artisanal and small-scale miners work informally and face harsh conditions. Before critical-mineral production ramps up even further, African communities, stakeholders, and governments must take steps to formalize these workers—and the international community, including the United States, should help.
What is the problem?
In contrast with ASM, large-scale mining (LSM) is industrial and long-term, utilizing heavy machinery to extract resources. Furthermore, LSM has more geological information available to it and better access to capital and finance. Most importantly, LSM generally operates within the rules of law and adheres to international standards and regulations. It is accompanied by many challenges, however, including causing ecological and habitat damage; polluting the water, air, and soil; and threatening human health. Even where mining operations are conducted legally and formally, they still pose significant environmental and socioeconomic problems.
Although vastly different types of mining, ASM and LSM often take place in overlapping spaces, with ASM operations appearing on the periphery of larger industrial sites. Artisanal miners frequently live and work in areas earmarked for large-scale mining projects, blurring the line between the two. This is exemplified by the presence of illicit or licit networks of middlemen who transport ore from ASM sites to LSM companies and processing facilities. Middlemen often aggregate minerals from various sources, including both ASM and LSM operations, making it especially difficult to trace the origin of the minerals. The fragmented and opaque nature of the mineral supply chain complicates the traceability of products from upstream suppliers to downstream companies.
There are many challenges associated with artisanal mining. At least 90 percent of artisanal miners work informally, without the necessary licenses or permits required by law. Securing permits improves miners’ access to services they are unable to access in the informal economy—such as microfinance credit, grants, and government loan facilities, which, in turn, place the miners in a better position to accumulate wealth. In many cases, ASM activities are found in regions that are out of reach of regulators, where the institutional presence of the government is weak. By operating outside of state recognition, it becomes impossible for the government to establish and enforce health and safety standards and regulations.
With informal mining operations flying under the radar of the government, either by the design of mining site owners or willful ignorance on the part of the government, workers are routinely exposed to poor labor conditions and dangerous situations. Artisanal miners often work without proper tools and protective gear in unsupported and poorly ventilated underground shafts where, as Amnesty International points out, temperatures can be extremely high. Exposure to the dust and mineral waste generated from these mines can lead to potentially fatal diseases and health conditions, and the dust and waste also contributes to pollution and environmental degradation in the area surrounding the mine.
Across the African continent, artisanal mining has been linked to human-rights violations, forced labor, crime, and conflict. These issues, compounded with artisanal miners’ lack of legal rights, exacerbates their vulnerability and the cycles of poverty and exploitation they face.
More at stake
The problems in ASM often present a significant barrier to sustainable foreign investment in African critical minerals. The aforementioned problems in the artisanal sector have made Western business interests hesitant to invest in Africa’s critical minerals. Poor labor practices and human rights violations associated with ASM could expose global companies to reputational and regulatory risks. These concerns—combined with pressure from non-governmental and human-rights organizations—make investment in ASM a complicated and risky proposition.
This barrier is present in artisanal cobalt mining in the Democratic Republic of the Congo (DRC). Cobalt is a critical component of many lithium-ion batteries, including ones used to power electric vehicles, produce components for wind and solar energy technologies, and power portable electronic devices such as smartphones. The DRC accounts for more than 74 percent of global cobalt mining, and 20 to 30 percent of that is via ASM.
In some regions of the DRC, artisanal miners are exploited by armed groups that seek to control mining areas and siphon revenue to finance their operations, purchase weapons, and sustain conflicts. Militias have abducted and trafficked children to extract cobalt as well as copper, in a bid to fund their groups. In addition, some ASM cobalt operations employ children. It was once estimated that forty thousand children were mining for cobalt, working in life-threatening conditions and exposed to violence, extortion, and intimidation.
Such problems associated with informality, including the absence of regulatory standards and the occurrence of human-rights violations, make it difficult for potential investors to justify long-term investments. Without clear, enforceable laws, investors face a high-risk business environment and unpredictable changes in mining policies, which undermine investor confidence.
In addition to posing these immediate risks to artisanal miners and their communities, informal mining exacerbates economic and market instability on a macroeconomic level. Informal miners typically earn a meager and unstable income, which is subject to fluctuation based on the market prices and demand for cobalt. Miners’ economic instability translates into broader economic uncertainty for the sector and limits opportunities for community development. The presence of such substantial unregulated economic activity leads to significant tax revenue losses for the government, because these transactions primarily occur outside of official channels. This undermines the state’s capacity to invest money in necessary social programs, build infrastructure, and quell violence in other regions of the DRC. In spite of these challenging economic implications, African governments might resist formalization efforts, unwilling to disrupt the vital role ASM plays in the livelihoods of many individuals and communities across Africa.
While artisanal cobalt mining in the DRC provides a case study, some of these issues associated with informality are also prevalent in the mining of critical minerals in other African nations, such as lithium production in Zimbabwe and Namibia. Across the continent, the volatility of ASM creates a less attractive investment environment, given that investors seek dependable production to ensure stable supply chains and therefore profitability.
What might formalization look like?
Despite the complications associated with the informal production of many critical minerals, the solution is not to disengage from ASM; it employs 90 percent of the mining workforce. Rather, the solution lies in formalizing and legalizing ASM, which will help mitigate the risks inherent to these mining operations while fostering a more regulated and stable environment for international investment in Africa’s critical minerals.
Integrating the ASM sector into the formal economy would help improve local security, stabilize incomes, and ensure that safer and more environmentally sustainable practices are implemented. It would also help create national regulations and international standards, pressuring the ASM sector to improve practices to become compliant.
Formalization means that miners are registered with proper mining titles. Even in some countries where ASM is recognized by law, governments have not made it possible for miners to obtain the necessary permits and licenses. But in addition to these permits and licenses, formalization also includes—according to the Washington-based nonprofit Pact—efforts by the mining industry to enact chain of custody and supply chain transparency measures; health, safety, and environmental protections; security and human-rights protections; measures that improve access to finance; and requirements to use proper mining techniques. In addition, formalization includes sound industry policies, procedures, and due diligence systems, which should be in place throughout the life cycle of a mine. These components of formalization create a framework within which artisanal miners can operate safely and legally, contributing positively to community-wide and country-wide development goals and global supply chains.
Given the complexity of the informal economy, there is no simple, one-size-fits-all approach to formalization. We can, however, look for strategies that have been effective in other countries or industries and use them to guide the approach towards formalizing ASM. For example, Rwanda’s 2010 Land Tenure Reform Programme initiated a systematic registration effort to promote land access and address tenure insecurity. This program registered over ten million land parcels in less than five years and enabled landowners to use their property as collateral for loans, facilitating access to credit. The program has been widely regarded as successful in integrating the informal economy, particularly due to its simple registration process and involvement of community members and stakeholders in the reform. Transitioning ASM to the formal economy must also use an integrated whole-of-society approach, centering African communities, stakeholders, and governments. This might mean starting small at a grassroots level by engaging local communities in social dialogue, allowing informal miners to express their views and defend their interests. Their inclusion at an early stage of the formalization process will ensure that policies address informality efficiently and enhance the effectiveness of such measures.
There have been some efforts in recent years to support the formalization of ASM workers and improve social and environmental practices in the sector. For example, as the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) explains, international Fairtrade and Fairmined standards set minimum standards for responsible mining, which support formalization. Furthermore, chain of custody initiatives trace supply chains from mine to market to ensure that supply chains are not associated with any conflicts or human rights abuses and that they meet international regulations. These are certainly steps in the right direction but, as the IGF explains, there are concerns about the long-term sustainability of these initiatives and whether they are reaching the most marginalized communities.
Formalization is a very complex but necessary process that can improve the lives of miners and address issues in the critical-mineral supply chain—and therefore attract more sustainable investment to the sector, contributing to the broader development goals of African countries.
How the international community can help
As mineral extraction in Africa is only expected to increase in the foreseeable future, it would be strategically unwise for the international community, and in particular the United States, to sit idly by on the issue of formalizing artisanal mining.
Going forward, the United States can focus on capacity building and simplifying trade processes and market access to help formalize artisanal mining in Africa, which could lead to increased global investment in critical minerals. To build the foundation for policies and programs that provide legal protection for ASM miners, the United States could fund and support training programs for artisanal miners, local authorities, and government officials on sustainable mining practices, health and safety standards, regulatory compliance, and business skills. By strengthening local and national institutions responsible for overseeing the ASM sector, governments would be better able to enforce regulations, protect the rights of artisanal miners, and formalize the sector.
The United States could also work with African governments and international organizations—such as the African Union and the United Nations Conference on Trade and Development—to simplify trade procedures, enabling miners to participate legally and more fully in global supply chains. In December 2022, the United States signed a memorandum of understanding with the DRC and Zambia to develop a productive electric-battery supply chain—from the extraction of minerals to the assembly line. The agreement also serves as a commitment to respect international standards and to prevent, detect, and fight corruption and build a sustainable industry in Africa that benefits workers and local communities, as well as the US private sector. At this time, it is more political than actionable, although it creates a framework for future negotiations and strengthened partnerships. Deepening ties with African nations and collaborating with international organizations can help leverage the resources, expertise, and global networks to ensure a more conducive environment for investment and sustainable growth. Increasing institutional capacity would also allow governments to strengthen tenure security and clarify property rights for ASM, particularly reducing the incidence of ASM-LSM conflict.
The creation of more legal channels for miners to sell their products could enhance supply chain transparency and promote more sustainable market practices. Implementing an international certification mechanism, similar to the Kimberley Process Certification Scheme (KPCS), offers the ASM sector an opportunity for empowerment and a pathway towards legitimacy. Originally established to remove conflict diamonds from the global supply chain, the KPCS mandates that member countries adhere to strict certification requirements, import and export controls, regular audits, and controlled trade. The principles of the Kimberly Process might be adapted to the extraction of critical minerals so as to increase the security of artisanal miners and their access to legal markets.
Not only would these policy actions benefit African countries in the context of the critical-minerals boom and improve the livelihoods of miners, but they would allow the United States to strengthen its economic and strategic partnerships with African countries. As critical minerals will continue to advance the clean-energy transition, decisive action is essential to make the future of mining a pathway for inclusive, sustainable development for the countries that supply minerals to the world.
Sarah Way is a graduate of the University of Colorado Boulder’s International Affairs Program with a specialization in Africa and the Middle East. Her research centers on the intersection of natural resources and development, with a specific focus on extractive minerals in Africa.
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Image: Artisanal miners work at the Tilwezembe, a former industrial copper-cobalt mine, outside of Kolwezi, the capital city of Lualaba Province in the south of the Democratic Republic of the Congo, June 11, 2016. REUTERS/Kenny Katombe/File Photo